Switch off the editor’s digest free of charge
Roula Khalaf, editor of the FT, selects her favorite stories in this weekly newsletter.
After decades in which the pensions in many parts of the world were endangered-from scandal, changes in accounting and other political changes stimulated-swinging the pendulum quickly in the other direction. In many cases, this can be appropriate. In others it can be open to abuse.
Consider the case of the Italian sales employee Enasarco, which was announced last week Assigned 67 percent From its entire European stock portfolio to a shares, Mediobanca. This group is the focus of a power struggle about how the Italian banking sector consolidates. The system rejected it to comment on why, but critics have pointed out alliances with government numbers that underpinned the curiosity that the Italian Ministry of Finance itself is the pension regulation.
The participation can turn out to be a “productive investment” or not, since the large buzz phrase of asset management fails (e.g. if it helps to make successful bank processing easier). But it is certainly a considerable gambling for a transaction that logically has no place in the investment portfolio of a schema that should concentrate on providing stable age income for hundreds of thousands of pensioners without using their means to play political power games.
“Productive investment” is more common today with private capital, which is reflected in the genius of the sector in the sequest rate of the label and then reflected Echos create Approval of political decision -makers on both sides of the Atlantic.
Sure enough, the London Mayor of London is this week to improve his move for pensions to increase her private allocations of capital. Build up Villa House Accord He obliges that signing pension funds would be more involved in areas such as private equity and debts, and has now made great employers to promise that they are less fees and more about the return potential of assets such as private capital when assigning assets.
Legal & General, now last week Complete a deal With Blackstone to assign up to 20 billion USD of its annuity funds for private loans.
One of the fastest growing insurance companies in Europe went one step further. Athora, the insurance vehicle supported by Apollo, which bought pension systems throughout Continental Europe. bought the purchase announced From the British Pensions Insurance Corporation, even a purchaser of employers’ defined performance systems.
Athora is in the possession of Apollo – both directly and through the US insurance for private capital giants Athena. But even if this line is largely distributed, Apollo’s influence is clear. It controls five of 11 seats (although it points out that there is a “conflict committee” at the board level under the chair of an independent director).
And it followed a clear mode operandi for the European pension systems that it has spent in recent years. “According to new acquisitions,” says Athora in his annual report: “We invest and turn the acquired asset portfolio towards our strategic asset allocation” goal “. This means that it is ensured that a” greater share of searching to assets is.
Private capital has clear merits. It tends to be long -term structure in harmony with pension liabilities. Although the fees can be higher, the returns can also be. And as a rapidly growing part of the company financial landscape, investors cannot afford to ignore it.
But there are hooks. One of them is that private capital investments, in contrast to their listed colleagues, are not rated transparently or in some cases. In March, the British Financial Conduct Authority, which assets asset managers, released A detailed study About private capital evaluation practices. There were essential causes of concern. It asked companies to manage conflicts of interest more effectively and ensure that they carry out independent reviews that are underpinned by the right government and documentation systems.
The potential conflicts are in insurance companies that are controlled by private capital companies themselves-as in the United States or in part, as in Europe, where the supervisory authorities hesitate to complete alliances.
Twenty years ago, bankers of “Master-of-the-University” were generally regarded as the smartest people in finance. But the shareholders and taxpayers found out in 2008 equally that they had stacked the stakeholder chances in their own favor. Nowadays, when the best brain for wealth management and private capital, it is pensioners who might be careful.
